ORVI’s latest report, “Filling the Hole,” laid out a five-part policy to ensure that the oil and gas industry foots the bill for the tens of billions of dollars of decommissioning costs. The policy would create a comprehensive program for well decommissioning funded entirely by the oil and gas industry.
Perhaps the most exciting part of decommissioning the potentially 1 million oil and gas wells across Appalachia is the prospect of thousands of good paying and consistent jobs for Appalachian workers.
This piece crunches employment numbers from “Filling the Hole” and the Department of the Interior to come up with a rough estimate of how many jobs might be created in Appalachia from well decommissioning. In total, a comprehensive 20-year well decommissioning program could create 14,000 oil and gas jobs across Appalachia every year, plus 28,000 indirect and induced jobs. Indirect and induced jobs are jobs that are supported by, in this case, oil and gas jobs. For example, jobs in restaurants that feed oil and gas workers.
The prospect of consistent long-term employment is especially important because the oil and gas industry is famously volatile. The industry is dependent on ever shifting prices and the boom and bust cycle as new oil and gas plays are discovered, exploited, and depleted. In Appalachia, there were consistently about 10,000 jobs in the upstream oil and gas industry in the early 2000s. Employment briefly shot up to over 40,000 in 2014 during the region’s shale boom before falling back to earth. Since the pandemic, regional upstream oil and gas employment has hovered around 20,000 jobs.
Figure 1: Total upstream employment in the oil and gas industry in Pennsylvania, Ohio, and West Virginia, 1997-2023
NAICS codes 211 and 213, US Bureau of Labor Statistics
As part of the Bipartisan Infrastructure Law of 2021, the Orphaned Well program spent $1.2 billion to plug over 9,000 wells over three years. This works out to $135,000 per well plugged, very close to ORVI’s estimate of $120,000 on average to plug a conventional vertical well. Program spending supported almost 13,000 total jobs, approximately 10.6 jobs per million dollars spent, according to the US Department of the Interior.
Figure 2: Bipartisan Infrastructure Law Orphan Well Program expenditures and jobs supported
Of those 10.6 total jobs, Filling the Hole co-author Dwayne Purvis further calculates that, per million dollars spent on well decommissioning, about 3.6 oil and gas jobs are created. With those figures, what would that mean if the roughly $40 billion cost to plug all 285,000 of Appalachia’s current unplugged wells were spread equally over the next 20 years? At $2 billion per year, there would be about 7,200 oil and gas jobs created every year, plus an additional 14,000 indirect jobs for a total of 21,200 jobs. (The math: 3.6 oil and gas jobs * 2,000 millions of dollars spent = 7,200 jobs per year; 10.6 total jobs * 2,000 millions of dollars spent = 21,200 jobs per year.)
Decommissioning Appalachia’s current unplugged wells over 20 years would increase employment in the upstream oil and gas industry by 30% from 2023 levels. These jobs would be relatively immune to the boom and bust cycle, providing stability for Appalachian workers and their families for a generation.
This does not even factor in the potential job opportunities for decommissioning the unknown number of legacy wells. There are somewhere between 144,000 and 691,000 unplugged legacy wells in Appalachia, which could cost between $17 billion and $83 billion to plug. If the total cost ends up at around $40 billion for these wells, and the program to plug them took 20 years, there would be an additional 7,200 oil and gas jobs every year, the same job creation potential as plugging the wells we already know about.
Combined, a 20 year program to decommission Appalachia’s oil wells, known and unknown, could create over 14,000 oil and gas jobs, and over 40,000 total jobs, every year. Adding these jobs to the existing 20,000 oil and gas jobs would have nearly the same economic effect as the mid-2010s shale boom. Except this time, the boom would be sustained for a full 20 years, providing consistent employment for a generation of Appalachian workers and their families.
Finally, and it bears repeating, the proposed policy reforms would ensure that this economic opportunity and environmental cleanup would be funded not by the government, but entirely by the industry.
[1] US Department of the Interior, “Bipartisan Infrastructure Law projects in three programs support an average of 17,669 jobs and $2.0 billion to the economy in Fiscal Years 2022 and 2023,” November 14, 2023, https://www.doi.gov/sites/doi.gov/files/bil-fy22-23-econ-contrib-jobs-formatted-final.pdf
[2] US Department of the Interior, “Bipartisan Infrastructure Law projects in three programs support an average of 17,669 jobs and $2.0 billion to the economy in Fiscal Years 2022 and 2023,” November 14, 2023, https://www.doi.gov/sites/doi.gov/files/bil-fy22-23-econ-contrib-jobs-formatted-final.pdf
[3] US Department of the Interior, “Bipartisan Infrastructure Law projects in four programs support over 28,000 jobs and $3.3 billion to the economy in Fiscal Year 2024,” November 13, 2024, https://www.doi.gov/sites/default/files/documents/2024-11/bilfy24econcontribjobsformattedclean11-05-24_0.pdf